I. Amendments, Amalgamation, and Transferring Business

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 127-128

Page 127

Banks as corporate legal persons are dynamic and change over time, so the Bank Act contains provisions relating to several different kinds of changes banks are likely to make. Earlier in this chapter,⁴¹²in the context of incorporation, two procedures were discussed whereby other business corporations could continue as banks, that is, trust and loan companies, insurance companies and business corporations to which the CBCA or any other federal statute applied. Reference was also made⁴¹³to the statutory provisions for the continuation of a bank as a trust or loan company. In addition to continuation as another type of financial institution, the Bank Act provides for three other types of fundamental changes:

(i) amendment to an incorporating instrument in relation to the capital structure of a bank; (ii) amalgamations of two or more bodies corporate, including banks to form a new bank; and (iii) sale of assets by a bank to another financial institution or to an authorized foreign bank.

The first process permits a bank to change its capital structure, name, or head office by special resolution of the shareholders and after approval of the Minister of Finance. Letters patent are required to effect the change. Subsequent changes to the by-laws to reflect the amended letters patent are to be approved by special shareholder resolution and the Superintendent. Any director or shareholder may initiate a proposal to change the let-

Page 128

ters patent and no amendment affects any existing cause of action, claim, liability to prosecution or any civil, criminal, or administrative action or proceeding against the bank, its directors, or officers.⁴¹⁴

The second process permits the amalgamation of two or more federally incorporated bodies corporate, including banks and bank holding companies, to amalgamate and continue as one bank by the issue of letters patent by the Minister of Finance. To effect amalgamation, each amalgamating party shall enter into an amalgamation agreement setting out such terms as name, head office, directors, capital structure, by-laws, and the proposed effective date of the amalgamation. The agreement must be approved by the shareholders of each body corporate and by the Superintendent. Public notice is required prior to the application to the Minister for letters patent, and the Minister is required to consider the same types of matters relating to the soundness, experience, and reputation of the applicants and the...